The court orders permanently restrain Robert James Price, Ronald Curtin, William Millar and three related companies from any further involvement with the sale of horse-betting software OffTrack and variations of the software Bankers Choice and Autotab.
The Federal Court issued the orders after the Australian Competition and Consumer Commission (ACCC) instituted proceedings against the companies and the men on 29 June 2001, following a lengthy investigation.
The court also directed Price - the man the ACCC claimed was the de facto director and -controlling mind" behind the three companies - and Curtin to pay an undisclosed sum of money to the ACCC to compensate 15 consumers who assisted the court action. Millar has agreed to perform community services with a charity raising money for gambling addicts.
The court agreed with the ACCC's view that Offtrack and its variants was gambling software and that the men misled consumers by marketing them as investment programs.
The agreement is in line with undertakings given to by Queensland-based Acepark in July 1999 when the regulator first accused it, under the directorship of Price, of breaching the Trade Practices Act. The ACCC alleged Acepark had misled consumers by claiming the software could pick winning horses with a high degree of success.
A woman who bought the software hoping that it would allow her to quit her job to look after her partner who was critically ill was at the focus of the ACCC's investigation.
The ACCC alleged that Acepark had used -unfair pressure and tactics" to sell the software to her.
At the time Acepark gave undertakings that it would refund its customers, and change its sales and marketing methods.
It appeared that the matter had been resolved but the scam continued to operate for two years. The software's promoters attempted to evade scrutiny from unhappy customers, fair-trading bodies, and its obligations to the ACCC by re-birthing the operation behind new company names.
In mid-2001 the ACCC caught up with the group. After investigating number of individuals involved with three Queensland-based companies promoting variations of the software, it successfully applied for an injunction preventing further activity to sell the software.
The injunction made special provisions for Price, restraining him from being involved directly or indirectly in any activity marketing the betting software through any corporation.
The injunction also prevented the companies from promoting the software or -any substantially similar software" as a low risk investment program and claiming affiliations with the TAB until the matter could be resolved by the Federal Court.
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"There exist a number of operators promoting such gambling schemes who will potentially be affected by this decision. These operators need to be aware that if they adopt similar business practices they run the real risk of breaching the Act and ACCC action", said ACCC chairman, professor Alan Fels.
The ACCC said it didn't know how many consumers were drawn into the scheme between 1999 and 2001. However a spokesperson for the ACCC said the commission was still receiving calls regarding Offtrack and Bankers Choice on a weekly basis.
The ACCC has defended its decision to enter to accept undertakings from the scam operators in 1999. ACCC spokeswoman, Lin Enright, said that the ACCC has a mandate to get the best possible outcome for the public at the lowest possible cost.
If the promoters contravene the orders this time they risk jail terms, said Enright.
-Courts don't like it when their orders are not carried out," said Enright.
The ACCC said that other consumers caught by the scam who have not been compensated would have to pursue financial remedies through private legal action.
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It's amazing that these get rich schemes keep conning people. If something is too good to be true then it is. When I heard about this in early 2000 and previewed the glossy brochure and flash video CON screamed out at me. I showed this to some people I knew and was surprised at a couple of very positive reactions. I blew it apart, and was shocked at how gullable we are. Also got some ShareMarket software info, a mere $10,000! Was later offered to me at a special $5000! These ads appear all the time. If people are willing to be conned these will keep coming.